Economy

Agriculture, forestry, and fishing

Agriculture is of basic importance to Assam, engaging
about half of the total working population and
generating roughly one-third of the state’s gross
product. Rice accounts for more than two-thirds of the
sown area. Tea and jute, widely cultivated in the
Brahmaputra valley, are important foreign-exchange
earners. Assam grows a large portion of the country’s
tea. Other crops include oilseeds, pulses (legumes, such
as peas, beans, or lentils), corn (maize),
sugarcane, rape (an oil-yielding plant, the leaves of
which are used for fodder), mustard, potatoes, and
fruits. Through improved cultivation methods, some
farms yield more than one crop per year.
Livestock and dairy farming have shown moderate
growth since the late 20th century, largely promoted by
the government. Nevertheless, those activities remain
but small contributors to the state’s economy.
Sericulture (raising of silk worms), on the other hand,
is well established, and Assam is a major producer of
silk.
In the forestry sector, sal and other tropical hardwoods
are highly valued. Depletion of forest resources and
increased erosion, however, have led the government to
impose logging bans and enact other legislation to
reestablish the country’s woodlands. Aside from timber,
important forest products include bamboo, firewood,
and lac (the source of shellac).
Aquaculture has been a major focus of agricultural
development since the mid-1990s, and yields have
increased. Overall yield, however, has continued to fall
short of domestic demand.

Resources and power

Minerals exploited commercially in the state
include petroleum, coal, natural gas, and limestone.
Since the late 19th century, extensive oil reserves have
been discovered in northeastern Assam. A refinery,
built in the region in 1901 at Digboi, was the first in
South Asia. Later, another refinery was established
in Guwahati in the west-central part of the state. Coal—
used locally by the railways, tea estates, and steamships
—also is found in northeastern and south-central
Assam. Liquefied natural gas is produced in the
northeast, and limestone is quarried in the Mikir Hills.
Assam’s energy is provided by thermal and
hydroelectric plants. Less than half of the state’s energy
is generated locally, however. A significant portion of
Assam’s power is purchased from the national
government, private sources, and, to a much lesser
extent, other state governments.
Manufacturing
Development of the manufacturing sector has
been inhibited by the state’s isolation from the rest
of India, by an underdeveloped transport system, by a
small local market, and by the lack of sufficient capital.
Small-scale industrial enterprises produce (or process)
fertilizer, jute, paper, silk and textiles, sugar, chemicals,
electronics, and cement. Sawmills and plywood and
match factories make use of timber resources.

Transportation
Historically, geography has inhibited the growth of
efficient transport systems, and underdeveloped
transport and communication systems have in turn
hindered economic development in Assam.
The Brahmaputra, for example, long has been a major
barrier to integrating the transportation networks lying
north and south of the river. The situation improved,
however, with the opening of several rail and road
bridges since the late 20th century.
With Assam’s abundance of waterways, inland water
transport is important. The Brahmaputra and Barak
(Surma) rivers are the state’s primary water channels.
Numerous passenger ferries operate between various
points on the Brahmaputra, and freight service is
offered between Guwahati and Kolkata, West Bengal.
There is considerable air traffic between Assam and
Kolkata. Among the towns with air service are
Guwahati, Dibrugarh, Jorhat, Tezpur, and Silchar. The
Guwahati airport offers international service.